Berry v. City of New York

District Court, S.D. New York·Decided May 1, 2024·No. 1:22-cv-05969·Unknown

Opinion

USDC SDNY DOCUMENT UNITED STATES DISTRICT COURT ELECTRONICALLY FILED SOUTHERN DISTRICT OF NEW YORK DOC #: RONALD BERRY, DATE FILED: [1/2024 Plaintiff, -against- 22-CV-05969 (MMG) THE CITY OF NEW YORK, etal., DECISION & ORDER Defendants.

MARGARET M. GARNETT, United States District Judge: Before the Court is Defendant New York City Transit Authority’s (the “Transit Authority”) request to remain in this action solely for the purpose of pursuing its state law counterclaim against Plaintiff Ronald Berry (“Plaintiff”). See Dkt. No. 88. For the reasons discussed herein, the Transit Authority’s request 1s denied. BACKGROUND The Complaint in this action asserted a number of claims against the City of New York, the Transit Authority, and individual employees of both entities—including false arrest, malicious prosecution, and assault—all arising out of an arrest of the Plaintiff on or about October 3, 2019. See Dkt. No. 1. Plaintiffs arrest appears to have been precipitated by a Transit Authority employee calling the police to have Plaintiff arrested as a trespasser on Transit Authority property, apparently based on a view that Plaintiff was, in fact, no longer a Transit Authority employee. /d. As background to the circumstances of his arrest, Plaintiff's Complaint sets out facts regarding his employment with the Transit Authority, his medical leave from that employment, and his regular bi-weekly appearance at his former duty station to collect his paycheck, including on the day of the arrest that formed the basis for the claims brought in the Complaint. /d. On July 31, 2023, the Transit Authority answered the Complaint and counterclaimed on a state law theory of unjust enrichment for the six years’ of paychecks that Plaintiff recerved while Plaintiff was purportedly on medical leave. See Dkt. No. 52 at 9. On March 8, 2024, the City of New York and its employee defendants were dismissed from the case upon notification of settlement. On the same date, the Court granted the Transit Authority’s unopposed motion to dismiss all claims against it in this action, and all claims against its employee Michael Herer except the false arrest claim under 42 U.S.C. § 1983. See Dkt. No. 82. Thus, following these dismissals, the only direct claim remaining in the case 1s the false arrest claim against Defendant Herer.! In granting the Transit Authority’s motion to dismiss, the Court did not rule on whether | Plaintiff has asserted his willingness to dismiss the remaining claim against Defendant Herer, if the Transit Authority does not pursue its counterclaim. See Dkt. No. 89.

the Transit Authority could remain in the action to pursue its counterclaim, and the Transit Authority promptly alerted the Court to this unresolved issue and requested clarification. See Dkt. No. 83. The Court subsequently ordered the Transit Authority to provide a letter “not to exceed three pages outlining the legal justification for this Court retaining jurisdiction over its Counterclaim against Plaintiff when no cause of action against the Transit Authority remains.” Dkt. No. 85. On March 21, 2024, the Transit Authority submitted a letter asking the Court to exercise its discretion as to “supplemental jurisdiction” over the Transit Authority’s counterclaim. See Dkt. No. 88. On March 22, 2024, Plaintiff opposed the Transit Authority’s request. See Dkt. No. 89. DISCUSSION Whether the Transit Authority can pursue its counterclaim despite having been dismissed as a Defendant in this case—an unusual situation with a dearth of analogous instances in caselaw—turns on a two-part legal inquiry. First, the Court must determine whether the Transit Authority’s counterclaim is compulsory under Federal Rule of Civil Procedure 13(a), and therefore whether the Court has independent subject matter jurisdiction to hear it. See Harris v. Steinem, 571 F.2d 119, 121 (2d Cir. 1978) (“[N]o independent basis of federal jurisdiction is needed for the court to adjudicate the ancillary issues thus raised [by a compulsory counterclaim], if the main claim itself presents a colorable federal issue.”); see also Jones v. Ford Motor Credit Co., 358 F.3d 205, 210–213 (2d Cir. 2004). If the counterclaim is not compulsory but rather permissive, the Court must then determine whether it can and should exercise supplemental subject matter jurisdiction over the state law counterclaim pursuant to 28 U.S.C. § 1367(a). For the reasons stated below, the Transit Authority’s counterclaim is both permissive and outside the scope of the Court’s supplemental jurisdiction, and therefore must be dismissed. I. The Transit Authority’s Unjust Enrichment Counterclaim is Permissive Federal Rules of Civil Procedure 13(a) and 13(b) divide counterclaims into two basic categories—compulsory and permissive. Fed.R.Civ.P. 13. “Whether a counterclaim is compulsory or permissive turns on whether the counterclaim arises out of the transaction or occurrence that is the subject matter of the opposing party’s claim, and this Circuit has long considered this standard met when there is a logical relationship between the counterclaim and the main claim.” Jones v. Ford Motor Credit Co., 358 F.3d at 209 (internal quotation marks omitted). “Although the logical relationship test does not require an absolute identity of factual backgrounds, the essential facts of the claims [must be] so logically connected that considerations of judicial economy and fairness dictate that all the issues be resolved in one lawsuit.” Id. (internal citations and quotation marks omitted).

In its submission to the Court providing a legal justification for remaining in this action, the Transit Authority does not address the compulsory-permissive distinction but admits that the relationship between its counterclaim and Plaintiff’s claims is “somewhat attenuated.” See Dkt. 88 at 2. And indeed, when reviewed under the “logical relationship” test, the unjust enrichment counterclaim is clearly permissive. In broad strokes, the Complaint alleges violations of Plaintiff’s constitutional rights arising out of his October 3, 2019 arrest. See Dkt. No. 1. That arrest appears to have been precipitated by divergent views as to whether Plaintiff was still a Transit Authority employee, legitimately on medical leave, and thus permitted on Transit Authority property to collect his paycheck. The Transit Authority’s unjust enrichment counterclaim for the paychecks received during the majority of what Plaintiff asserts was an authorized medical leave accordingly bears some relationship to the claims asserted in the Complaint. However, the determination of whether Plaintiff’s constitutional rights were violated by his 2019 arrest for trespass is not logically dependent on whether he was unjustly enriched to the detriment of the Transit Authority for several years prior to that arrest, nor does the counterclaim “arise[] out of the transaction or occurrence that is the subject matter” of the Plaintiff’s claims. Jones v. Ford Motor Credit Co., 358 F.3d at 209.

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